Confusion over Air France low-cost plans as strike deepens

PARIS - Confusion reigned Wednesday over Air France's plan for its low-cost subsidiary that has been at the heart of a bitter and costly strike, as the government and management contradicted each other.

As the strike at Europe's second-biggest flag carrier stretched into its 10th day, Transport Minister Alain Vidalies told French radio the airline had scrapped plans to expand its Transavia budget subsidiary.

"The Transavia Europe project has been abandoned by management," Vidalies told RMC radio.

But within minutes an Air France spokesman told AFP it was "premature" to say the airline had buried the plans to develop its budget subsidiary, which it sees as vital to survive in the cut-throat world of low-cost aviation.

"There is no change in the negotiations to suggest that this project has been withdrawn," a spokesman told AFP.

"The proposal on the table remains to freeze this project and to begin a wide dialogue with social partners between now and the end of the year, as management announced on Monday," added the spokesman.

The confusion between the government and management of the airline - which is nearly 16 per cent state-owned - appeared to mirror the disruption that has gripped air travellers in France for more than a week.

As in previous days, more than half of Air France flights were cancelled nationwide but the situation at some regional airports was much worse, with 80 and 70 per cent of flights scrapped at the southern airports of Nice and Toulouse respectively.

'Last offer'

In what it described as a "last" offer to break the deadlock, as the strike stretched into a second week, management on Monday offered to put the project on hold until December.

But unions dismissed this as a "smoke screen" that would not protect jobs in France.

The pilots are striking in protest at the airline's plans to develop Transavia, which serves holiday destinations across Europe and the Mediterranean.

They fear the airline will seek to replace expensive Air France pilots, who can earn up to 250,000 euros (S$408,050) a year, with Transavia pilots, who are paid considerably less.

The 10-day strike is already the longest at the airline since 1998 and is costing up to 20 million euros daily, estimates management, which has warned it will have a major impact on profits.

Unions have threatened to extend the action until Friday if their demands are not met and pilots marched through Paris in uniform on Tuesday, wearing "Made in France" striped sailor jerseys draped around their shoulders.

A counter-demonstration is planned for Wednesday at the main Paris airport, Charles De Gaulle, in support of management.

The government has called several times for the strike to be halted, with Prime Minister Manuel Valls saying the image of France is at stake.

Vidalies on Wednesday repeated the call for pilots to return to work, saying "there is no longer any reason for the strike to continue".

But unions have complained that the lines of dialogue with management are down as the strike becomes increasingly bitter the longer it continues.

"We haven't had any meeting with Air France to discuss (the strike) since Friday," complained Jean-Louis Barber, head of the main pilots' union SNPL.

"Management spent more time last weekend setting up its media strategy than consulting with us," he added.

However, the chief executive of the wider Air France-KLM group, Alexandre de Juniac, hit back, stressing: "Negotiations have not been broken off. Our door is open."